Shopping Centers Today

AUG 2017

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

Issue link: https://sct.epubxp.com/i/853369

Contents of this Issue

Navigation

Page 46 of 59

A U G U S T 2 0 1 7 / S C T 47 High tide in Miami the type of flood zone, flood insurance adds some 20 to 40 cents per square foot to retail rents in Florida, he says. "There is also a 30-day wait period be- fore a flood policy becomes effective." Some of Jones' Florida clients are paying more for NFIP flood insurance than for property and wind insurance combined, he says. "So you have to turn over every stone to find private alternatives," he said. Some owners are still paying through the nose because their insurance agents either lack the knowledge of private plans or fail to do the research into the alternatives, he says. One option for owners who do not qualify for a private flood-in- surance policy through a single carrier could be to contract with multiple in- surers to share the risk, Jones advises. Many owners make the mistake of reducing coverage amounts to lower overall expenses, says Birdie. A better ap- proach would be to raise the deductible, he says. Owners can also save on insur- ance by including their properties in a master policy provided by their proper- ty-management companies, Birdie says. "My company's master insurance policy, which includes coverage for property, liability, flood and excess [liability], provides a savings of 30 percent to 40 percent in lower premiums," Birdie said. "These savings alone more than pay for property-management fees." A building's physical profile will have a significant impact on flood in- surance costs, says risk-management specialist Brian DiDonato, senior man- ager of CBRE's global risk management division. "And the better the quality of information provided to insurance car- riers, the more likely you will obtain a more competitive quote." To keep insurance costs lower and protect their properties, some cen- ters are making accommodations to steadily rising tides. At Miami's Brickell City Centre, Hong Kong–based Swire Properties built the mixed-use complex higher than the flood plain. Swire also constructed an elevated sea wall and in- stalled floodgates that can tightly seal off the underground car park at the center, which is being built in phases to include shops, residences, offices and a hotel. While coastal property owners will always pay more for flood insurance, some inland areas may also see in- creases, depending on the region and on the ways carriers choose to factor in storm surge risks, DiDonato says. Through NFIP, flood coverage is avail- able for up to $500,000 for building and contents separately, he says. The ability of the insurance indus- try to statistically predict the risks for flooding is still in its infancy, relative to earthquake and hurricane modeling, says DiDonato. Until an accurate model is cre- ated, "coverage will be limited in avail- ability, and it will be priced accordingly." A spring 2017 report from the American Academy of Actuaries titled National Flood Insurance Program: Challenges and Solutions, says the use of big data combined with advanced computing is opening up opportunities for private insurance sellers to insure and reinsure flood risks. The enhanced data will also offer the NFIP better ways to align pre- mium with risk, reducing the need for subsidies, according to the report. About 1.8 million of the approx- imately 5 million U.S. businesses and homes covered by NFIP are in Florida, according to FEMA. With its 1,200 miles of coastline and with three-fourths of its residents living near the coasts, Flor- ida is considered the most vulnerable to rising sea levels of any state in the continental U.S. Meanwhile, federal flood programs in Florida remain un- derfunded, "but luckily, lack of major particularly on Florida's West Coast, where the water is considerably shal- lower than on the Atlantic side, he says. Most flood hazard zones are east of I-95, on the state's East Coast, and west of I-75, on the West Coast, says Mez R. Birdie, CRX, CSM, director of retail and investment services at Orlando, Fla.–based NAI Realvest. "But because Florida includes lots of lakes, rivers and canals, many developments are affected beyond the coasts." Private insurers remain choosy about who qualifies for coverage, says Birdie. Depending on

Articles in this issue

Archives of this issue

view archives of Shopping Centers Today - AUG 2017